NEW YORK (Reuters) – Morgan Stanley's first-quarter profit dropped nearly 50 percent, hurt by a steep decline in bond trading revenue.
The bond trading business has long been a trouble spot for the bank. The operation generated big losses during the financial crisis and then lagged rivals during a recovery in 2009.
Chief Executive James Gorman is pushing the division to gain market share and improve its performance.
Morgan Stanley posted quarterly net income for shareholders of $736 million, or 50 cents a share, down from $1.41 billion, or 99 cents a share, in the same quarter last year.
Fixed income trading revenue fell across Wall Street in the first quarter after unusually strong results in the year-ago period. But some banks have experienced more weakness than others. Morgan Stanley's revenue for its fixed income and commodities sales and trading unit fell by 35 percent to $1.77 billion.
Goldman Sachs Group Inc posted a 28 percent decline for its fixed income customer trading business, while JPMorgan Chase & Co posted a decline of just 4 percent.
Morgan Stanley said its bond trading results were lower mainly because of weakness in credit products, which typically include corporate bonds and credit derivatives. The bank posted higher revenue in interest rates, and commodities trading improved from a year earlier.
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